Dallas Salisbury retired in December from his position as president and CEO of the Employee Benefit Research Institute, an organization he helped get off the ground in 1978. EBN spoke to Salisbury, who will maintain ties to EBRI as president emeritus and resident fellow, about some of the biggest changes he’s seen in the employer-sponsored healthcare and retirement benefits landscape over the course of his career.
What’s changed the most in retirement and healthcare benefits since you started at EBRI?
When EBRI was created, 10 of the 13 founding firms really viewed themselves primarily as actuaries to defined benefit pension plans. Everything else was secondary. They all had some healthcare consulting practices, but fairly limited. They all did some work on profit sharing plans and thrift savings plans and stock bonus plans, but all of that was relatively limited. … Large, huge entities focusing on defined contribution plans did not exist.
Large enterprise consulting groups focusing on healthcare cost containment literally did not exist. None of those businesses that now are rampant in the display hall at your conferences existed.
Of all employer-based health insurance at that point in time, [the majority] of the people covered were in so-called indemnity insurance plans that were generally first-dollar plans. They generally had either no employee premium or very, very low employee premiums. Basically, you went and anything you wanted done, got done and it just all happened.
Overall, would you say this system of employer-sponsored healthcare has that been a success or a failure and why?
Well, I think on all of these things, the judgment factor on all of them to me has always been what did they provide relative to what many in society had available to them.
Up until the effective date of the Affordable Care Act, it [was] the predominant source of health insurance in the United States. For those that weren't super poor, meaning that I wasn't on Medicaid and I wasn't disabled or old so I wasn't on Medicare, it was the employment-based system. It was a system that because it was these large pools and groups, it then gave people in general very good health insurance, certainly, far, far better than what people in a pre-Affordable Care Act environment were capable of getting in private market as individuals.
[The employment-based model] facilitates enrollment. It facilitates group design, it facilitates payroll deduction. It just makes it a lot easier. As a small employer, we've only got 15 people. I know that even when I compare what today is available to me through [our insurer] as a small employer, as part of an employer pool, compared to what I would be able to buy from [them] on the DC health exchange as a plan [that] meets the Affordable Care Act requirements, what they will sell EBRI for me to have is a far, far better product, dollar for dollar, than what they will sell to me as an individual under the Affordable Care Act. One can say that that’s a strength of the employer system, or one can say that’s a failure of the Affordable Care Act. Since I view all of these things as basically public policy, I'm not in the business of saying what should be. It is what it is and the law is the law.
Given what the Affordable Care Act and the law are today, is there tremendous advantage to the continued existence of the employment-based system as it currently exists in the current environment? Absolutely. It is hugely beneficial to the worker, and if it’s beneficial to the worker, vis a vis health and quality of health, then it is definitely a benefit to the employer, which was the reason employers have sponsored health insurance for decades. Because it keeps people at the office, it keeps people working. It contributes to productivity. It's the whole, if you will, wellness movement.
Who do you see as some of the outliers today who might have a big influence on employee benefits down the road?
It is so heavily being driven by technology. … We're halfway through [the decade] so it may well be an entity like Morningstar. I'd say that in a broad sense because Morningstar now has the HelloWallet unit, which is health and financial wellness, and that's being adopted and used by many enterprises.
Automated systems [such as robo-advisers] driven by all these fancy mathematical algorithms and formulas, with limited human contact [is another component.] That was described favorably by some at the DOL [fiduciary rule] hearing. … [Others say] it will be the end of people being able to get that personal financial advice. The truth, ultimately, is always going to be somewhere in between.
Ten or 12 entities now dominate the defined contribution, defined benefit recordkeeping world. [They may] end up consolidating further as cost pressures, as technology, as employee movement [continue]. [One of them] may be the enterprise of tomorrow.
What’s the role of data in employee benefits and why is it important for plan sponsors to have a resource like EBRI?
When a plan sponsor is doing any decision-making in any piece of their business, they've increasingly become data driven and [are asking] what will the effect of this be? Can we afford it? All of that comes down to data and data and analysis.
That [EBRI] benchmarking that is truly across all plan sizes and all industries allows one to track over time how the system is working, how participants behave. … It allows an individual employer to benchmark the national data versus one provider that they may work with. It allows them to do that benchmarking very, very broadly.
What would you say is your biggest accomplishment or what are you most proud of over the course of your 37 years at EBRI?
If I’m proud of something, it’s that after 37 years I am passing on the mantle to somebody else, of an entity that I absolutely believe and can point to countless situations in which the works that we have done and do, has made a difference to individuals, a difference to families, a difference to enterprises, a difference to employers, a difference to government decision makers.
